Managing your earnings in 2022: Can we impact 2023 and beyond?

Abstract

So far, 2022 is shaping up as a year where cash and profits may rebound within the dairy industry to levels that have not been seen for a few years. While inflation and supply chain issues are driving costs up on dairy farms, milk prices are strong and appear to have generated stronger cash positions through the first third of the year. With the strong cash positions, questions are starting to be asked about potential strategies to maximize the opportunity associated with the stronger positions this year. How long will the milk price stay strong enough to offset rising input costs? Will a smaller national heifer inventory and milk processing limitations slow the growth of milk production? Will supply chain issues continue to impact both farm production and processing capacity? With the uncertainty towards what earnings might be over the course of the year and into the next, there is the potential for earnings to decrease or turn negative.